Covid-19 Oil Stockpiles to Weigh on Market Beyond End of 2021

Surplus stockpiles of crude and refined products built up around the world during the depths of the Covid-19 pandemic still won’t be cleared by the end of next year, even if the OPEC+ countries stick rigorously to their output curbs. That’s the conclusion from the latest monthly reports from two of the world’s three big oil forecasting agencies.

The oil supply/demand balances from the International Energy Agency and the Organization of Petroleum Exporting Countries both indicate that, even assuming OPEC oil production at target levels through the remainder of this year and throughout 2021, global inventories will still be above the levels seen at the end of 2019 (see chart above). The size of the surplus ranges from 106 million barrels seen by the IEA to almost 500 million barrels in the OPEC forecast.